(Australian Associated Press)
Iron ore prices have plunged below $US50 a tonne for the first time in nearly three months, heaping more pressure on Australian miners.
The spot price for Australia’s biggest export plunged $US2.70, or 5.1 per cent, to $US49.60 a tonne on Tuesday.
It was the ninth day of falls in a row and marks the commodity’s lowest level since mid-April.
The price has fallen more than 30 per cent in 2015 and is a long way from the $US180-plus a tonne prices of 2011.
Patersons economist and analyst Tony Farnham said investors were fretting about oversupply in the steelmaking commodity and near-term growth prospects for China, the biggest destination for Australian iron ore.
Many analysts predict a fall to below $US40 a tonne in the next year or two.
The only producers that can generate positive cash from a price that low are companies that contribute to supply increases, such as BHP Billiton, Rio Tinto and Brazil’s Vale.
Atlas Iron, for instance, proudly announced recently that it had drastically cut its breakeven iron ore price to $US50 a tonne from $US60, but it is now unprofitable again at Tuesday’s closing price.
Iron ore exports from Port Hedland in Western Australia, the world’s largest iron ore port, hit a record high in June as prices continued to fall.